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Exam 13: Statement of Cash Flows

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Question 81

True/False

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The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate.

A) True
B) False

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Question 82

Multiple Choice

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For each of the following activities that may take place during the accounting period, indicate the effect a-g on the statement of cash flows prepared using the indirect method.Choices may be selected as the answer for more than one question. -gain on sale of investments

A) increase cash from operating activities
B) decrease cash from operating activities
C) increase cash from investing activities
D) decrease cash from investing activities
E) increase cash from financing activities
F) decrease cash from financing activities
G) noncash investing and financing supplement

H) C) and E)
I) B) and G)

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Question 83

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If a business issued bonds payable in exchange for land, the transaction would be reported in a separate schedule on the statement of cash flows.

For each of the following, identify whether it would be disclosed as an operating O, financing F, or investing I activity on the statement of cash flows under the indirect method. a._____purchased buildings b._____sold patents c._____net income d._____issued common stock e._____paid cash dividends f._____depreciation expense

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

For each of the following activities that may take place during the accounting period, indicate the effect a-g on the statement of cash flows prepared using the indirect method.Choices may be selected as the answer for more than one question. -purchase of equipment

Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

Changes in current assets and current liabilities are reported on the statement of cash flows, indirect method, in the

The following information is available from the current period financial statements:

Identify the section of the statement of cash flows a-d where each of the following items would be reported. -Increase in income taxes payable

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

Which of the following would not be classified as an operating activity?

Net income was $51,000 for the year.The accumulated depreciation balance increased by $14,000 over the year.There were no sales of fixed assets or changes in noncash current assets or liabilities.Under the indirect method, the cash flow from operations is $37,000.

For each of the following, identify whether it would be disclosed as an operating O, financing F, or investing I activity on the statement of cash flows under the indirect method. a.____received dividends b.____paid of dividends c.____purchased of equipment d.____net income e.____issued company's common stock f.____amortization expense

For each of the following activities that may take place during the accounting period, indicate the effect a-g on the statement of cash flows prepared using the indirect method.Choices may be selected as the answer for more than one question. -acquisition of treasury stock

Cash paid for equipment would be reported on the statement of cash flows in

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000.As a result of this transaction, cash would

Lamar Corporation purchased land for $150,000.Later in the year, the company sold land with a book value of $190,000 for $200,000.Show how the effects of these transactions are reported on the statement of cash flows using the indirect method.

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

On the statement of cash flows, the cash flows from investing activities section would include